EXHIBIT 10.2
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT made this 1st day of September, 2005, by and
between AGREE REALTY CORPORATION, a Maryland corporation (the "Company"), and
XXXXX XXXXXXXX (the "Executive").
W I T N E S S E T H :
WHEREAS, the Executive is expected to make certain contributions to the
financial strength of the Company;
WHEREAS, the Company desires to assure itself of the continuity of
management and desires to establish certain compensation rights of certain of
its key senior executive officers, including the Executive; and
WHEREAS, the Company desires to employ the Executive and the Executive
desires to accept such employment on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the parties hereto hereby agree as follows:
1. EMPLOYMENT; TERM. The Company hereby employs the Executive as Vice
President of the Company and the Executive agrees to serve the Company in such
capacity for the period commencing on October 3, 2005 (the "Effective Date") and
ending on October 3, 2008.(the "Initial Term").
2. TERMINATION. Subject to the terms and conditions set forth herein, the
Executive's employment may be terminated by either party hereto upon thirty (30)
days' written notice to the other party hereto.
3. DUTIES. The Executive shall be responsible for the development, land
acquisition, entitlements and leasing affairs for the Company and shall have
such additional duties and any additional responsibilities as are normally
assigned to a Vice President which may from time to time be reasonably
designated by the Board of Directors of the Company (the "Board"), provided that
in no event shall the scope of her duties and the extent of her responsibilities
be substantially different from the duties and responsibilities usually
associated with those positions in a publicly-held corporation similar in size
and function to the Company. At all times, the Executive shall be subject to the
direction of the Board. During the period the Executive is employed by the
Company (the "Employment Period"), the Executive shall devote her full business
time and best efforts to the business and affairs of the Company and its
subsidiaries. The Executive will not be prevented from (i) engaging in any civic
or charitable activity for which the Executive receives no compensation or other
pecuniary advantage; (ii) investing her personal assets in businesses which do
not compete with the Company, provided that such investment will not require any
services on the part of the Executive in the operation of the affairs of the
businesses in which investments are made which would unreasonably interfere with
her obligations hereunder; (iii) purchasing securities in any corporation whose
securities are publicly traded, provided that such purchases will not result in
the Executive owning beneficially at any time five percent (5%) or more of the
equity securities of any corporation engaged in a business competitive with that
of the Company; (iv) serving as a director of any corporation that does not
engage in any business which is competitive with the then current business of
the
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Company as any of its subsidiaries (as defined in Section 7 hereof); or (v)
participating in any other activity approved in advance in writing by the Board.
4. COMPENSATION. The Company shall pay the Executive a salary at the rate
of two hundred forty thousand dollars ($240,000.00) per annum. Such compensation
shall be payable in accordance with the usual payroll practices of the Company,
as compensation to the Executive for the services rendered by the Executive
hereunder, including, but not limited to, all services rendered by the Executive
as an officer or director of the Company and its subsidiaries.
SEE ADDENDUM ATTACHED
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5. BENEFITS.
(a) The Company agrees to reimburse the Executive for all reasonable
and necessary travel, business entertainment and other business expenses
incurred by the Executive in connection with the performance of her duties under
this Employment Agreement. Such reimbursements shall be made by the Company on a
timely basis upon submission by the Executive of documentation in accordance
with the Company's standard procedures. All such reimbursements shall be subject
to limitations, which may from time to time be prescribed by the Board.
(b) The Executive shall be entitled to participate in any and all
life insurance, medical insurance group health, disability insurance, and other
benefit plans which are made generally available during the Employment Period by
the Company to executives of the Company, including, but not limited to, the
Company's Stock Incentive Plan, Profit Sharing Plan and performance Bonus Plan
(to the extent that the Executive qualifies under the eligibility provisions of
such plan or plans). Additionally, the Executive shall be entitled to receive
four weeks annual paid vacation and paid holidays made available pursuant to
Company policy to all of the senior executives of the Company. The paid vacation
shall be pro-rated, based on an annual amount during the remaining months in the
Executive's first calendar year of employment.
(c) In the event of the death or disability (as defined below) of
the Executive, the Executive's employment hereunder shall terminate, and in
addition to any amounts payable at such time and in accordance with the terms of
Section 4 hereof (appropriately pro-rated), the Company shall, for the longer of
(i) the remainder of the calendar year in which the Executive
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dies or becomes disabled or (ii) six (6) months, pay to the Executive or the
Executive's personal representative, as the case may be, the Executive's salary
at the date of such death or disability, and the pro-rata portion of the
Executive's average bonus over the previous calendar year. In addition, all
unvested shares of the Company's common stock issued to the Executive under the
Company's Stock Incentive Plan shall become fully vested. For the purposes of
this Employment Agreement, the term "disability" shall mean the absence of the
Executive, due to physical or mental illness, on a full time basis for one
hundred twenty (120) consecutive business days or for shorter periods which
aggregate more than four months during any consecutive twelve (12) month period.
(d) In the event the employment of the Executive is terminated by
the Company for any reason other than for cause (as defined below), the
Executive shall be entitled to all amounts payable during the Initial Term
(including, but not limited to, salary at the then applicable rate) and bonuses
earned but unpaid within ten (10) days of such termination and the Executive
shall have the right to continue to participate in all benefit plans made
generally available by the Company to its executives during the Initial Term. In
addition, all unvested shares of the Company's common stock issued to the
Executive under the Company's Stock Incentive Plan shall become fully vested.
For purposes of this Section 5(d) the term "cause" shall mean: (i) the
Executive's willful failure or refusal to perform specific reasonable written
directives of the Board, which directives are consistent with the scope and
nature of the Executive's duties and responsibilities under this Employment
Agreement, and which are not remedied by the Executive within sixty (60) days
after being notified, in writing, of her failure by the Board; (ii) the
Executive's conviction of a felony; (iii) any act of dishonesty involving the
Company which results in an unjust gain or enrichment to the Executive at the
expense of the
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Company; (iv) any act involving moral turpitude of the Executive which adversely
affects the business of the Company; or (v) a material breach by the Executive
of her obligations under Section 7 hereof. For purposes of this Agreement, no
act or failure to act on the part of the Executive shall be deemed "willful" if
it was due primarily to an error in judgment or negligence, but shall be deemed
"willful" only if done or omitted to be done by the Executive not in good faith
and without reasonable belief that her action or omission was in the best
interest of the Company.
The Executive shall not be deemed to have been terminated for "cause"
hereunder unless and until there shall have been delivered to the Executive a
copy of a resolution duly adopted by the affirmative vote of not less than a
majority of the Board then in office at a meeting of the Board called and held
for such purpose, after reasonable notice to the Executive and an opportunity
for the Executive, together with her counsel (if the Executive chooses to have
counsel present at such meeting), to be heard before the Board, finding that, in
the good faith opinion of the Board, the Executive had committed an act
constituting "cause" as herein defined and specifying the particulars thereof in
detail.
(e) In the event this Employment Agreement is terminated by the
Company for "cause," the Executive shall forfeit her right to any and all
benefits (other than any previously vested benefits, including, without
limitation, the Executive's salary through the date of termination) which the
Executive would otherwise have been entitled to receive pursuant to the terms of
this Employment Agreement. In addition, if the Executive voluntarily terminates,
the Executive shall re-pay any incentive cash or stock awards received during
the initial term.
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6. CHANGE IN CONTROL OF THE COMPANY.
If a Change in Control (as defined below) of the Company occurs prior to
the scheduled expiration of the Term of this Employment Agreement and within one
year after the Change in Control of the Company, the Executive is terminated by
the Company for reasons other than death, disability, or cause, the Company, or
any successor thereto, will pay to the Executive within 30 days of Executive's
termination of employment, an amount equal to the greater of (i) one times
Executive's compensation, or (ii) the Executive's compensation due over the
Initial Term of this agreement which, for purposes of this Section, "Executive
compensation" shall mean an amount equal to the highest annualized rate of
Executive's salary prior to the date of termination. In addition, all unvested
shares of the Company's common stock issued to the Executive under the Company's
Stock Incentive Plan shall become fully vested and bonuses earned but unpaid.
For purposes of this Agreement, a "Change in Control" shall have occurred
if at any time during the Term any of the following events occurs:
(a) The Company is merged, consolidated or reorganized into or with
another corporation or other legal person and as a result of such merger,
consolidation or reorganization less than a majority of the combined voting
power of the then-outstanding securities of such corporation or person
immediately after such transaction are held in the aggregate by the holders of
Voting Stock (as hereinafter defined) of the Company immediately prior to such
transaction;
(b) The Company sells all or substantially all of its assets to any
other corporation or other legal person, less than a majority of the combined
voting power of the then-
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outstanding voting securities of which are held in the aggregate by the holders
of Voting Stock of the Company immediately prior to such sale;
(c) There is a report filed on Schedule 13D or Schedule 14D-1 (or
any successor schedule, form or report), each as promulgated pursuant to the
Exchange Act, disclosing that any person (as the term "person" is used in
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the
beneficial owner (as the term "beneficial owner" is defined under Rule 13d-3 or
any successor rule or regulation promulgated under the Exchange Act) of
securities representing 25% or more of the combined voting power of the
then-outstanding securities of the Company entitled to vote generally in the
election of directors of the Company ("Voting Stock");
(d) The Company files a report or proxy statement with the
Securities and Exchange Commission pursuant to the Exchange Act disclosing in
response to Form 8-K or Schedule 14A (or any successor schedule, form or report
or item therein) that a change in control of the Company has or may have
occurred or will or may occur in the future pursuant to any then-existing
contract or transaction; or
(e) If during any period of two consecutive years, individuals who
at the beginning of any such period constitute the directors of the Company
cease for any reason to constitute at least a majority thereof unless the
election, or the nomination for election by the Company's stockholders, of each
director of the Company first elected during such period was approved by a vote
of at least two-thirds of the directors of the Company then still in office who
were directors of the Company at the beginning of any such period.
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Notwithstanding the foregoing provision of Section 6(c) or 6(d) hereof, a
"Change in Control" shall not be deemed to have occurred for purposes of this
Agreement solely because the Company, an entity in which the Company directly or
indirectly beneficially owns 50% or more of the voting securities of such
entity, any Company-sponsored employee stock ownership plan or any other
employee benefit plan of the Company either files or becomes obligated to file a
report or a proxy statement under or in response to Schedule 13D, Schedule
14D-1, Form 8-K or Schedule 14A (or any successor schedule, form or report or
item therein) under the Exchange Act, disclosing beneficial ownership by it of
shares of voting securities of the Company, whether in excess of 25% or
otherwise, or because the Company, reports that a change in control of the
Company has or may have occurred or will or may occur in the future by reason of
such beneficial ownership.
7. CONFIDENTIALITY. The Executive shall not at any time use or divulge,
furnish or make accessible to anyone (other then in the regular course of the
business of the Company or any of its subsidiaries) any knowledge or information
of trade secrets and proprietary information which has not otherwise become
publicly available (including, but not limited to, any information concerning
customers or accounts) with respect to the business affairs of the Company or
any of its subsidiaries.
8. NOTICES. All notices relating to this Employment Agreement shall be in
writing and shall be deemed to have been given at the time when delivered
personally or sent in the United States by registered or certified mail, return
receipt requested, in a postpaid envelope, addressed to the other party at the
address set forth below, or to such changed address as the other party may have
fixed by notice; provided, however, that any notice of change of address shall
be effective only upon receipt:
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To the Company Agree Realty Corporation
00000 Xxxxxxxxxxxx Xxxxxxx
Xxxxxxxxxx Xxxxx, XX 00000
To the Executive Xxxxx Xxxxxxxx
0000 Xxxxxxxx Xxx
Xxxxx, XX 00000
9. ASSIGNABILITY, BINDING EFFECT AND SURVIVAL. This Employment Agreement
shall inure to the benefit of and be binding upon the Company, its successors
and assigns, including without limitation any corporation which may acquire all
or substantially all of the Company's assets and business or with or into which
the Company may be consolidated or merged, and shall inure to the benefit of and
be binding upon the Executive, her heirs, executors, administrators and legal
representatives, provided that the obligations of the Executive hereunder may
not be delegated.
10. COMPLETE UNDERSTANDING; AMENDMENT; WAIVER. This Employment Agreement
constitutes the complete understanding between the parties with respect to the
employment of the Executive hereunder, and no statement, representation,
warranty or covenant has been made by either party with respect thereto except
as expressly set forth herein. This Employment Agreement shall not be altered,
modified, amended or terminated except by written instrument signed by each of
the parties hereto. Waiver by either party hereto of any breach hereunder by the
other party shall not operate as a waiver of any other breach, whether similar
to or different from the breach waived. No delay on the part of the Company or
the Executive in the exercise of any of their respective rights or remedies
shall operate as a waiver thereof, and no single or partial exercise by the
Company or the Executive of any such right or remedy shall preclude other or
further exercise thereof.
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11. SEVERABILITY. If any provision of this Employment Agreement or the
application of any such provision to any party or circumstances shall be
determined by any court of competent jurisdiction to be invalid and
unenforceable to any extent, the remainder of this Employment Agreement or the
application of such provision to such person or circumstances other than those
to which it is so determined to be invalid and unenforceable, shall not be
affected thereby, and each provision hereof shall be enforced to the fullest
extent permitted by law.
12. GOVERNING LAW. This Employment Agreement shall be governed and
construed in accordance with the internal laws of the State of Michigan without
regard to conflict of laws provisions.
13. INDEMNIFICATION. The Company shall indemnify the Executive against
judgments, fines, amounts paid in settlement and reasonable expenses, including
attorneys' fees actually and necessarily incurred, in any action or proceeding
to which the Executive is made a party by reason of the fact that he is or was
an officer or director of the Company, to the fullest extent permitted by law,
the By-laws of the Company and the Articles of Incorporation of the Company.
14. COUNTERPARTS. This Employment Agreement may be executed in
counterparts, all of which together shall constitute one agreement binding on
all parties hereto.
15. TITLES AND CAPTIONS. All paragraph, article or section titles or
captions in this Employment Agreement are for convenience only and in no way
define, limit, extend or describe the scope or intent of any provisions hereof.
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16. The Employment Agreement shall be renewed under the same terms and
condition for three-year periods thereafter, unless other wise stated and
received in writing from the Company.
IN WITNESS WHEREOF, each of the parties hereto has duly executed this
Employment Agreement as of the date first above written.
AGREE REALTY CORPORATION
By: /s/ Xxxxxxx Agree
-----------------------------
Name: Xxxxxxx Agree
Title: President
By: /s/ Xxxxx Xxxxxxxx
-----------------------------
Xxxxx Xxxxxxxx
Executive
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ADDENDUM
In addition to the compensation and benefits outlined in Section 4 of this
Employment Agreement dated September 1, 2005, the Executive shall be entitled to
receive the following:
1. On January 1, 2006 the Executive shall receive 2,000 shares of the
Company's Restricted common stock.
2. On January 1, 2007 the Executive shall receive 2,000 shares of the
Company's Restricted common stock.
3. On January 1, 2008 the Executive shall receive 2,000 shares of the
Company's Restricted common stock.
4. The Executive shall receive compensation at the rate of $2.00 per square
foot of leasable square footage for all development and land lease
projects payable upon lease commencement. Ex. - 40,000 square foot junior
box would equal payment of $80,000. The Executive has the option to
receive payment in stock in lieu of cash.
5. Car allowance of $500.00 per month plus the use of a gas credit card.
6. Coverage under the Company's health insurance plan. Currently Blue
Cross/Blue Shield. Premiums paid by Agree.
7. Laptop, blackberry, office and travel expenses.
8. Moving expenses for relocating to Michigan after one year, plus cost
associated with selling Texas residence (brokerage fees, closing costs)
9. A signing bonus of $65,000.00, payable on October 3, 2005.
Schedule A - 1
